3 opportunities for small businesses to thrive

As the world is moving digitally, data-driven insights have become one of the most crucial keys for business success.

Data-driven insights have various benefits like providing a better understanding of customer needs, and financial data to help businesses plot their business growth.

Xero’s State of Small Business report has revealed three key opportunities that small and medium enterprises (SMEs) can harness for their growth and success.

The digitalisation boost

Colin Timmis, country manager of Xero South Africa says the report shows the important role of digital transformation in the success of small, and medium enterprises (SMEs), as more than 41% of small businesses attributed their success to technology.

“With a steady year-on-year rise in cloud adoption, 68% of small business owners surveyed say cloud adoption helped them manage their finances better.”

He adds that as hybrid workspaces and online operations grow, they make digitisation a necessity and not a luxury.

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Tech adoption is growing each year, but he believes there is still room for growth. “Our research points to a skills gap, cost and not knowing how to get started as the main barriers for many SMEs.”

He advises SMEs to leverage digital tools to automate manual processes, operate online, and reach new customers, which can contribute to business growth and resilience.

Leveraging expert business advice

Timmis adds that the report reveals that in 81% of small businesses, their accountant is their most trusted advisor and 83% said their accountant has been crucial in helping their business grow.

“This trend highlights the important role of accountants in helping SMEs navigate challenges within the business such as complex tax requirements and regulations.”

He says it is critical for small businesses to tap into the wealth of knowledge and expertise that an advisor can bring.

“These professionals, such as accountants and advisors, bring years of industry experience and a deep understanding of the unique challenges and opportunities within the South African market.”

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Tapping into opportunities for growth

The report also reveals that 87% of the respondents were optimistic about their outlook for 2024, which is a 6% increase from the previous year. While 73% of those businesses had experienced growth during the 12 months prior.

“By leveraging technology and working with accountants, business owners can free up time to explore advancements such as automating routine tasks, improving communication, and providing real-time data insights.”

He also emphasises the importance of upskilling staff through online training programs.

He believes through such programs, SMEs can enhance their workforce’s capabilities, leading to improved productivity and innovation, which in the long run will enable them to thrive in a competitive landscape.

“With the continued advancement of digital technologies and the increasing accessibility of expert business advice, SMEs are well-positioned to seize new opportunities and drive economic growth in South Africa, but we must work together to help support the SME ecosystem.”

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About the report

This is the seventh State of Small Business report by Xero. It looks at the trends, challenges, and opportunities facing small businesses.

“We continue to use this to engage with small business groups, their accountants, banks, government, funders, and other technology companies – the key enablers of the small business community – so that together we can try and create a better future for our small businesses.”

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